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The Effects of Economic Globalization in the United States


Globalization can simply be defined as the process of interaction and integration of people, companies and governments from different parts of the world. The said interaction is for the sole purpose of trade or business. It has also been described to refer to the changes that have led to the freer flow of goods and services and factors of production across the countries. It is a principle that was brought forth by Adam Smith in 1776. Globalization is not a recent phenomenon, as many would believe. It is an ancient principle. The only recent aspect about globalization is the increased rate of permeation and interaction between people across the globe. Another aspect that makes globalization appear as a new phenomenon is the recent developments and innovations in the information technology. Due to the advancements in the information technology, globalization has become rife and a reality in the international market.

Therefore, the level of market penetration and interaction has increased. Goods and services are now easily traded across the borders. Different governments have in place policies that promote international trade. It must be known at this juncture that since 1950, the volume of world trade has grown by 20 folds. Globalization has had various phenomenon effects in different parts of the world. The effects have been both positive and negative. This paper will be an exploration into the positive and negative effects that globalization has had to United States (US).


From the above submissions, globalization has had both positive and negative effects on the US economy. However, it must be understood from the onset that the merits of globalization have been helpful in the development of the US economy. Surveys have shown that developed countries that have open economies have recorded 2.3% growth per year compared to 0.7% growth of the economies that have been said to be closed. The developing countries that have accepted globalization have recorded 4.5% per year growth while their counterparts have recorded o.7% growth.

It is therefore safe to conclude that the US economy has benefited from the aspect of globalization. US industries have acquired foreign markets for their goods, services and works. The economy has grown due to foreign investment that has increased greatly. Globalization has also facilitated the movement of technology to US from the Asian countries and has assisted in the research and development that had been lacking in the US market. There has been immense creation of employment for the Americans due to the foreign investment locally in US.

Though there has been a breakthrough in US relevant departments in developing international trade policies, there is need to consistently align these to the current economic situations. There needs to be full-fledged consultations with other foreign markets before a policy is arrived at.

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